Pulliam v. Pulliam (2015): Pension Benefits

As we've covered before on our blog, when spouses divorce, they can create their own private settlement agreement to divide their assets. Private settlement agreements can be quite beneficial because these agreements can bypass the default property division process implemented directly by the court. For these agreements to be enforceable, however, they must be signed by both parties and follow the other normal rules governing contractual arrangements.

Even after a private settlement agreement is developed and signed, the court still needs to review and approve that agreement. This is to ensure that everything in the agreement is executed properly and also to clarify precisely what will take place. Sometimes private agreements are unclear about how to divide property, and in these cases, the court can assist with resolving the situation. In Pulliam v. Pulliam, the court clarified how the husband's pension benefits should be divided, resolving any confusion surrounding the matter.

Overview of the Case

The couple in this case married in 2005 and divorced 5 years later in 2010. The couple developed a private settlement agreement, and that agreement was fairly executed and signed by both parties. However, uncertainty persisted regarding whether the husband’s pension benefits were included within the agreement. The husband had a Deferred Retirement Option Program (DROP) which derived from his employment as a law enforcement professional. The wife wanted to make sure if the husband's pension benefits were part of the settlement agreement due to his particular situation with DROP. The husband argued that these benefits should be excluded from the agreement.

Outcome of the Case: DROP Benefits are Just Pension Benefits

The wife won at the trial court level, and the appellate court affirmed this decision. The court determined that because the couple had specified that the husband’s pension was included in the agreement, this term encompassed the deferred benefits. Simply because the husband’s pension was tied-up with DROP didn’t mean that these benefits weren’t eligible for inclusion within the agreement. The court decision was supported by existing law, the Maryland Code and previous court rulings. These laws categorize DROP benefits as a type of pension benefit. The DROP program was not new, so the court was already quite familiar with this type of deferred or delayed system. Consequently, the wife was ultimately entitled to half of the pension benefits derived from the DROP.

Contact the Murphy Law Firm for Additional Information

This case shows, just like many others, the necessity of having a qualified attorney during the settlement agreement development phase. If the husband in this case would’ve consulted with an attorney, he may have avoided a lot of costly litigation.

If you would like to know more, get in touch with one of the top family law lawyers at the Murphy Law Firm a call today at 240-219-8963.

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